REAL PROPERTY LAW Frederick B. Skillern Montgomery, Little & McGrew, P.C. Greenwood Village BOUNDARY / ADVERSE POSSESSION Welsch v. Smith 113 P.3d 1284 (Colo. App. 2005) Colorado Court of Appeals, May 5, 2005 2005 Colo. App. LEXIS 680, 2005 WL 1039028 Adverse possession; prescriptive easement; permissive use. Welsch brought a claim against Smith for trespass, and Smith asserted a counterclaim based on adverse possession. The trial court concluded that Smith’s possession was permissive, and ruled for Welsch. This finding is reversed. A presumption of adversity arises when both property owners believe that a fence has marked the true boundary of the property for the statutory period. The prior owner of plaintiff’s land had not objected to Smith’s fence for more than eighteen years. Further, Smith’s removal of the fence on Welsch’s request -- after the running of the statutory period -- does not necessarily overcome the presumption of adversity as a matter of law. Finally, the court holds that permissive use does not need to be raised in the pleadings as an affirmative defense to an adverse possession claim because permissive use is simply the opposite of hostile and adverse use. Sleeping Indian Ranch v. West Ridge Group 119 P.3d 1062 (Colo. 2005) Colorado Supreme Court, September 12, 2005 Adverse possession; claim to vendor’s adjacent property; equitable conversion. Can a vendee under an installment land contract adversely possess other (and adjacent) land owned by his vendor? No, says the Supreme Court, reversing the court of appeals. This was predicted. However, the court takes more than ten pages to work through the complicated facts and the applicable law, and draws a dissent by the chief justice. Essentially A conveyed a large parcel to B under the terms of an installment land contract. B, prior to acquiring legal title, conveyed forty acre parcels to C, D and E, under verbal installment land contracts. C takes possession more than eighteen years prior to trial, and builds a cabin. C’s cabin encroaches on land retained by B. The trial court found, consistent with the obvious equities, that C could have title to the land occupied by it for more than eighteen years, and that it would not have to move the cabin. While one cannot adversely possess land being purchased from his contract vendor, because the entry by the vendee is permissive, not “hostile,” the same reasoning does not apply to adjacent land of the vendor to which the vendee has no legal or equitable right. The fact that a portion of the eighteen-year period of adverse possession ran while the vendor was itself a contract vendee is immaterial, since a contract vendee is considered the equitable owner of property under the doctrine of equitable subrogation. An equitable owner of property has standing to sue, and may assert a claim for adverse possession of adjoining land. The chief justice, in dissent, argues that adverse possession could not occur here because both vendor and vendee were part of a joint venture to acquire the lands in question from a distant vendor. However, the trial court found, with record support, that no joint venture or partnership existed, and the majority stood by the trial judge on this point. CONDEMNATION Kelo v. City of New London, Conn. 125 S. Ct. 2655, 162 L.Ed.2d 439 (June 23, 2005) U.S. Supreme Court, June 23, 2005 2005 U.S. LEXIS 5011, 2005 WL 1469529 Eminent domain; public purpose; private development; non-blighted land. The U.S. Supreme Court, in a 5-4 decision, cites with approval a series of prior cases granting deference to legislative judgments regarding whether a city or state’s development plan serves a “public purpose” under the Takings Clause of the Fifth Amendment. See, e.g., Berman v. Parker, 348 U.S. 26 (1954). Certiorari was granted to determine “whether a city’s decision to take property for the purpose of economic development satisfies the ‘public use’ requirement of the Fifth Amendment.” New London’s economic revitalization plan included seven parcels that would contain a waterfront conference hotel, restaurants, office and retail space, a marina, a “river walk,” new residences organized into an urban neighborhood, a U.S. Coast Guard Museum and other such uses. In order to convert this property the city was able to negotiate the purchase of most of the real estate in the area, but failed with respect to petitioners in this case. Homeowner-petitioners, owners of single family homes not subject to “blight,” asked the Court to adopt a bright-line rule that economic development does not qualify as a public use. The Court refuses to do that, and holds that the comprehensive development plan serves a public purpose if it creates jobs, provides for increased tax revenue, and if it is designed to create a “better balanced, more attractive community” in the judgment of local authorities, even if some individual properties are not blighted. The Court outlines factors to be weighed in the future, but provides no bright-line rule. The dissents are particularly vigorous and provide for good reading. Department of Transportation v. Marilyn Hickey Ministries Colo. App. October 6, 2005 2005 Colo. App. LEXIS 1598 (Colo. App. October 6, 2005) Eminent domain; damage to the remainder; damage for loss of view into property; inseparability doctrine. This condemnation case involves a partial taking of property in connection with T-REX. The taking involved a portion of the Marilyn Hickey Ministries property for a light rail 2 line, expanding the former I-25 right-of-way, and construction of a concrete retaining wall. The retaining wall blocks the view of the church from motorists who are traveling on I-25. Marilyn Hickey Ministries sought recovery of damages for this loss of visibility into the property as a part of the damage to the remainder of its property. The trial court excluded this evidence in an in limine hearing, and the evidence of this category of damage was not heard by the commissioners who heard the valuation hearing. The general test for recovery of damage to the remainder is that the property owner should be compensated for “all damages that are the natural, necessary and reasonable result of the taking.” La Plata Electric Association v. Cummins, 728 P.2d 696 (Colo. 1986). The court of appeals holds that any reduction in property value based on a loss of view into the property naturally, necessarily, and reasonably resulted from the construction of the concrete wall on the land that was taken. However, the court agrees with CDOT that the “doctrine of inseparability” should not apply to allow the property owner to recover for damages to the remainder cause by the construction of the concrete wall on the land of adjoining property owners. The court of appeals notes that while numerous other states have applied the doctrine of inseparability as an exception to the general rule of recovery of damages to the remainder of the owner’s property, the Colorado Supreme Court in a 1917 decision interpreted our eminent domain statute to exclude damages resulting from “what is done outside of the land condemned.” In short, damages to the remainder must be those “which result from the taking of the land condemned.” E-470 Public Highway Authority v. Kortum Investment Company Court of Appeals, August 11, 2005 121 P.3d 331 (Colo. App. 2005) Eminent domain; attorney fees. In the second case to interpret our new statute allowing a landowner to recover attorney fees in a condemnation action or a final award “equals or exceeds one hundred thirty percent of the last written offer given to the property owner prior to the filing of the condemnation action.” The court of appeals holds, applying the literal wording of the statute that a landowner is entitled to recover attorney fees if the final award exceeds one hundred thirty percent of the last written offer before the filing of the action, even if subsequent written offers are made after the action is brought, and after the petition is amended to add additional property to the claim. The court distinguishes the holding of another panel of the court in E-470 Public Highway Authority v. Wagner, 77 P. 902 (Colo. App. 2003). In that case, the court awarded attorney fees on a pro rata basis where the condemning authority amended its petition to reduce the amount of property taken. To determine whether attorney fees were to be awarded, the court compared the final award with the original offer on a pro rata basis. The court here concludes that the attorney fee award is not limited to those fees incurred before the “last written offer made shortly before trial – an interpretation of the statute adopted by the trial court. Accordingly, the case is reversed and remanded to the trial court for a full award for all attorney fees, including attorney fees on appeal. Factually, E-470 sought to acquire fee title to 14.1 acres, and a “permanent multi-use easement” for an additional 5.6 acres. Before trial, E-470 tendered a final written offer to 3 purchase this property and the easement for $101,880. As the case progressed, E-470 raised its offers, finally making an offer for $257,500. Shortly before trial, E-470 amended its petition to acquire the entire property in fee, and tendered a “new last written offer for $237,745. This offer was rejected, and the property owner obtained an award of $247,650 at trial. The court of appeals here applies the “pro rata” reasoning in Wagner, saying that the last written offer before the case begins ($101,880) “constitutes the standard against which entitlement to attorney fees must be measured. The court then pro rated that offer by applying the fee simple valuation to the entire parcel, reasoning that the same pre-trial offer for a fee simple interest would have been $118,873. Since this was less than half of the ultimate award, landowners get all of their reasonable attorney fees C.R.S. § 43-4-506(1)(h)(ii)(B). They also get fees on appeal C.A.R. 39(a). This statute now surfaces as a significant tool in the arsenal of the property owner facing condemnation. CONSTRUCTION / MECHANIC LIEN / WARRANTY Hoang v. Monterra Homes (Powderhorn) LLC Colorado Court of Appeals, February 24, 2005 2005 Colo. App. LEXIS 252, 2005 WL 427936 Comprehensive general liability policy; exclusions; garnishment of builder’s insurer; earth movement exclusion. Hoang and others obtain a large judgment against a builder (Powderhorn). Prior to entry of the judgment, Powderhorn’s liability insurer files a declaratory judgment action in another court seeking to avoid liability on its comprehensive general liability policy issued to Powderhorn for a period of years that overlap the construction in question. Hoang nevertheless serves a writ of garnishment on the insurers. The matter came before the original trial court on plaintiff’s traverse of the insurers’ denial of liability. The trial court denied the insurers’ requests for discovery, allowing only some interrogatories, and pushed the hearing on a tight schedule. Because of some signs that the trial court was biased, the court of appeals gives a thorough and very helpful analysis of the typical exclusions that are raised in construction cases dealing with a CGL policy. Consequently this case presents a good primer for reviewing that policy, which can appear arcane to the uninitiated—not unlike title policies, one might say. The court reviews the law on what is an “occurrence” and an “accident” within the policy; the latter turns on whether it is the “knowledge and intent of the insured” to cause the harm. Recovery is barred only if the insured intended the damages. The court reviews the “known loss” doctrine, and thoroughly discusses the “earth movement” exclusion, finding that it does not apply in this case, which deals with expansive soils under residential construction. However, this exclusion was only included in the policies that applied for the last three of five years at issue. This does not have much effect on the judgment, as most damages were apportioned by the judge into the first two years. The court holds that the trial court has discretion to allocate damages in a manner appropriate to the case, though the presumption is that an even allocation is proper if a reasonable allocation cannot be made on the facts of a case. 4 Compass Bank v. The Brickman Group, Ltd. Colorado Supreme Court, March 7, 2005 107 P.3d 955 (Colo. 2005) Mechanic lien; blanket lien; equitable apportionment. Can a mechanic lienor file a lien for the entire amount due to it against fewer than all of the properties benefited by its work? Yes, if the court equitably apportions the benefit obtained by properties released from the lien. The court holds, over a dissent, that the apportionment need not be described in the lien statement as a condition of perfecting the lien. Compare C.R.S. § 38-22-103(4) (authorizing blanket lien against all properties benefited) with C.R.S. § 38-22-109 (statement of amount due). The case is remanded “to attempt an equitable apportionment of the outstanding debt.” SMLL, L.L.C. v. Peak Nat’l Bank Colorado Court of Appeals, March 24, 2005 111 P.3d 563 (Colo. App. 2005) Administrative suspension of entity; statute of limitations; remedial revival statute. SMLL files a lawsuit against various parties involved with the construction and financing of its (unsuccessful) construction project. The trial court dismisses the action because SMLL (a limited liability company) had been suspended by the secretary of state for failure to file an annual report. The trial court finds that SMLL is incompetent to transact business in the state and therefore has no capacity to sue under C.R.C.P. 17. SMLL files a second action after being reinstated by the secretary of state. The trial court dismisses this action because SMLL’s claims are barred under the statute of limitations. Plaintiff argues on appeal that its second action was timely because it had filed it within ninety days of dismissal of the first action. Under C.R.S. § 13-80-111, the “remedial revival statute,” the running of an otherwise applicable statute of limitations is tolled when an original, timely action is dismissed for lack of jurisdiction and a new action is filed within ninety days. The court of appeals agrees with the trial court’s determination that a dismissal for lack of capacity or standing is not jurisdictional and, therefore, the remedial revival statute does not apply. A.C. Excavating v. Yacht Club II Homeowners Ass’n, Inc. Colorado Supreme Court, June 27, 2005 2005 Colo. LEXIS 634, 2005 WL 1501510 114 P.3d 862 (Colo. 2005) Subcontractor; duty of care; negligence; economic loss rule; residential construction defects. We reviewed the decision of the court of appeals last year. The Colorado Supreme Court reiterates a point that was implicit in its holding in Town of Alma v. Azco Constr. Inc., 10 P.3d 1256 (Colo. 2000), and holds that the economic loss rule does not bar negligence claims against contractors working on the construction of residential housing. The duty of 5 care in such a case does not arise solely from contract. Rather, it arises from the independent duty of care recognized in Cosmopolitan Homes v. Weller, 663 P.2d 1041 (Colo. 1983). The court notes, for the first time, that the duty of care owed to homeowners applies to subcontractors as well as general contractors. As an aside, the court notes that the general assembly has seemingly recognized this duty of care by including subcontractors within the class of construction professionals liable to homeowners for construction defects. C.R.S. § 13-20-802.5(4). Tuscany, LLC v. Western States Excavating, Pipe & Boring, LLC Colo. App. August 11, 2005 2005 Colo. LEXIS 1292 (Colo. App. August 11, 2005) Spurious lien statute; mechanic lien; statutory construction; restitution. In this important case concerning interpretation of the spurious lien and document statute C.R.S. § 38-35-201, et seq., the court of appeals held that the validity of a mechanic lien may not be determined (and the lien discharged) in a show cause hearing under the spurious lien and document statute. Here, Tuscany hired Western States for substantial work on a housing development. A dispute arose over approximately $1.3 million in payments. A settlement was reached, by which Tuscany paid Western States approximately $700,000 in return for execution of a lien waiver, with Tuscany promising to pay an additional $600,000 “in the near future.” The lien waiver was executed and given to Tuscany. Later, when the $600,000 was not paid, Western States recorded mechanic liens, but did not file a foreclosure action. Tuscany brought an action under the spurious lien and document statute. The trial court conducted a three day trial, a mere 33 days after the case was filed. The trial court, relying on the written release and the fact that the contractor took the risk of partial nonpayment”, concluded that the mechanic liens were groundless, and discharged the liens as “spurious documents” under C.R.S. § 38-35-201(sub 3). Apparently, the trial court noted that a mechanic lien could not be a “spurious lien” because the definition of a spurious lien excludes a lien authorized by statute; the trial court instead found the mechanic lien to be a “spurious document.” The court of appeals reverses. If a lien cannot be challenged as a spurious lien, it likewise cannot be challenged as a “spurious document.” The court examines the legislative intent and the legislative history behind drafting of the statute. Specific comments were made in a hearing before a legislative committee that mechanic liens could not be challenged under this statute. The court notes two possible interpretations of the statute. One interpretation provides that “spurious documents” means any document that is forged or groundless, contains a false claim, or is otherwise patently invalid. Since a lien must be reflected by a document, any document would include liens within this definition. On the other hand, the court noted that one can read the statute to say that a lien may be challenged only if it is a “spurious lien” applying principles of statutory construction, the court found that specific terms prevail over general terms, and that an interpretation should be adopted which avoids a conflict between two statutes. Since mechanic liens are liberally construed and the statute allows a mechanic lien to hold property for up to six months without a foreclosure action, the 6 expedited hearing provisions of the spurious lien and document statute would create a conflict. Next, the court of appeals rejects Tuscany’s argument that the error is harmless due to the fact that Western States failed to file a lien foreclosure action within the period of the statute of limitations. The court holds that the record was not sufficient to determine the statute of limitations of issue as a matter of law, and holds that this issue does not render the mechanic lien “moot”. Finally, it appears that Tuscany had obtained a judgment for costs and attorney fees in the trial court, and that Western States had not obtained a stay of execution by posting a supersedeas bond. Tuscany, while the appeal was pending, executed on its judgment, and sold a parcel of land owned by Western States. Since the judgment for attorney fees was set aside, the sale likewise must be set aside. However, the court limited the damages available to Western States to recovery of the proceeds of the sheriff’s sale, plus statutory interest. This follows the rule in the Restatement (First) of Restitution § 74, and assumes that the execution sale was properly conducted. The property was acquired by bona fide purchaser. CONTRACTS / SPECIFIC PERFORMANCE / FRAUD Denver Foundation v. Wells Fargo Bank, N.A. Colo. App. October 20, 2005 2005 Colo. LEXIS 1675 (Colo. App. October 20, 2005) Contract interpretation; trust agreement; cy pres doctrine. This case concerns the Denver Foundation, a community trust established in 1925. Since a trust at that time could not hold title to property, it was customary for donors to give money or property in trust, naming a bank as trustee. One such trust was formed in 1977, naming United Bank (now Wells Fargo Bank) as trustee. In 1983, the Denver Foundation created a nonprofit corporation with the same name. The corporation was authorized to hold and manage assets and investments. In this action, the Denver Foundation sought to transfer assets in the 1977 trust from Wells Fargo; Wells Fargo resisted, desiring to maintain control of the trust assets. The court of appeals reverses the holding of the Denver probate court requiring transfer of the trust assets, with some discussion that may be of interest to real estate lawyers, although the assets in question appear to have been stocks and bonds. First, if both parties to an agreement argue that the agreement is not ambiguous, it is appropriate for the court to interpret the agreement as a matter of law, and grant summary judgment to one party or the other. In this particular case, the trust agreement stated that the assets would be held in trust for the benefit of the Denver Foundation or its successors in interest. However, the trust agreement also provided that the Denver foundation was not authorized to direct disbursement of principal or invade the principal of the trust. The court noted that a provision in a trust agreement granting one party authority to construe a contract conclusively is invalid, and that discretionary authority to construe provisions of trust 7 agreements is subject to review by a court for reasonableness. The court determined that the cy pres doctrine is applicable here, as was the doctrine of equitable deviation. The court determined that the change in corporate structure of the Denver Foundation was not sufficient reason to render the restrictions in this particular trust agreement impossible, impracticable, or illegal to carryout the purpose of the settlor. Finally, the court determined that particular provisions of the trust allowing the Denver Foundation the power to modify the trust documents when changed circumstances render the restrictions unnecessary, undesirable, or inconsistent with the charitable needs of the community. This provision does not apply where the particular trust agreement specifically denies the Denver Foundation the power to invade the principal. COVENANTS / COMMON INTEREST COMMUNITIES Estate of McIntyre v. Lion’s Ridge #4 Homeowner’s Ass’n Colorado Court of Appeals, May 5, 2005 2005 Colo. App. LEXIS 671, 2005 WL 1038924 Restrictive covenant; subdivision restriction. McIntyre files a declaratory judgment action against his homeowner’s association and other individual lot owners, seeking to effect a resubdivision of his lot. The first Declaration of Protective Covenants, written in 1980, contained an express restriction against subdivision of lots in the subdivision. An Amended Declaration in 1985 did not contain the express restriction, and did not contain any express language either permitting or prohibiting subdivision. A 1999 Amendment included once again the express provision prohibiting subdivision. McIntyre argues that the elimination of the express provision in the 1985 document means that the prohibition on subdivision had been removed. The association counters that the revised definition of a “lot,” allowing only “one building per lot,” is tantamount to a prohibition on further subdivision. The appeals court agrees, rejecting McIntyre’s argument that this language restricts only the number of buildings per lot, not the number of lots in the development. The court reasons that the word “lot” as defined in the 1985 document refers to the units of property that were originally conveyed by the developer and, therefore, an express restriction on subdivision would be redundant. Because of its holding the court does not address McIntyre’s argument with respect to the validity of the 1999 Amendment. EASEMENTS / ROADS Eichhorn v. Kelley Colorado Court of Appeals, December 16, 2004, cert. granted May 16, 2005 111 P.3d 544 (Colo. App. 2004) Hunting easement; punitive contempt; private counsel authority to prosecute contempt proceedings. 8 This case is about the authority of a court to impose punitive contempt sanctions under C.R.C.P. 107 when the citation is prosecuted by counsel for one of the parties in pending litigation. However, the facts are interesting, so we take a look. X owns a ranch that is subject to a hunting easement appurtenant to adjoining property owned by Y. “A dispute arose,” the court opines in understated fashion, over the nature and scope of the easement. At one point, X gets sufficiently exercised about the hunters on his property that he takes to operating heavy equipment in a popular hunting ground, and he sets up a “hunting camp” of his own on an elk crossing. The trial court entered a judgment outlining the rights of the parties, warning that “the extraordinary use of motorized vehicles, excessive noise, and unreasonably large hunting parties” and similar acts by X in order to frustrate successful hunts by Y would be construed as a violation of the order. Ultimately X decides to go into the logging business and clear cuts some 300 acres. The judge holds him in contempt. That order is appealed, and is subsequently remanded for further findings as to whether the conduct was “offensive to the authority and dignity of the court” and for reconsideration of the sanctions. On remand, the judge sentenced X to two days in jail, and fines him $1,000. On appeal, the court holds that Y’s counsel was properly allowed to prosecute the contempt case. “When noncompliance with a court order occurs out of the direct sight or hearing of the court, it is proper for an aggrieved party . . . to bring the matter to the attention of the court by initiating contempt proceedings and seeking sanctions.” Most jail sentences for contempt are remedial, rather than punitive, so the issue has not really come up since the supreme court adopted C.R.C.P. 107 a few years back. The supreme court has accepted review on these issues: (1) whether private counsel for the beneficiary of a court order is authorized by statute to prosecute an alleged punitive contempt of that order on behalf of the court and, if so, whether that creates a conflict of interest or an appearance of impropriety; and (2) whether a beneficiary of a court order has standing to pursue punitive sanctions for an alleged contempt of that order. ESTATES / PARTITION / FORECLOSURE, DEBTOR-CREDITOR, RECEIVERS, LENDER LIABILITY Preserve at the Fort, Ltd. v. Prudential Huntoon Paige Assocs. Colorado Court of Appeals, December 30, 2004 2004 Colo. App. LEXIS 2422, 2004 WL 3015796 Deed of trust; contract interpretation; prepayment penalties; HUD regulations. Borrower sues lender for a refund of a portion ($104,000) of a fairly substantial prepayment penalty of $678,000 charged by lender and paid by borrower upon the refinance of a $16 million mortgage loan on an apartment project. The loan documents have arguably conflicting provisions, providing in the note that “notwithstanding any provision herein for a prepayment charge,” principal prepayments of less than 15% of principal in any one calendar year may be made without prepayment penalty. However, this provision of the note also said that it was “subject to the Rider attached hereto,” and the Rider provided that “[n]otwithstanding anything else in this Note to the contrary,” this 9 Note “may not be prepaid in whole or in part” prior to a date eight years down the road. Borrower lost, and the court of appeals affirms, holding that the Rider negates or supplants any language in the Note that might permit prepayment. Perhaps of greater interest, the court holds that these provisions do not violate HUD regulations that seem to prohibit imposition of a prepayment penalty on 15% of the original principal prepaid in any one calendar year. The court finds that an exception to this rule in 24 C.F.R. § 200.87(c) applies here and, therefore, authorizes the penalty. The exception applies where the mortgage is given to secure a loan made by a lender “that has obtained the funds for the loan by the issuance and sale of bonds or bond anticipation notes,” in which case the mortgage may contain a prepayment penalty. Perhaps counter-intuitively, “other bond obligation” includes any agreement between a mortgagee and a third party investor that provides for the pass-through of payments of principal and interest actually received by the mortgagee at a stated interest rate and on a fixed income schedule. Here, lender's “participation and serving agreement” with a third party lender fits the bill—and the prepayment penalty passes muster. See Mortgagee Letter 87-9, interpreting 24 C.F.R. § 200.87(c). First Atlantic Mortgage, LLC v. Sunstone North Homeowners Ass’n Colorado Court of Appeals, February 24, 2005 2005 Colo. App. LEXIS 262, 2005 WL 427700 HOA assessment lien; super priority; foreclosure. This case, brought in the context of a spurious lien action under C.R.C.P. 105.1, explores the maximum amount that an association can claim to be senior to the lien of the first mortgage lender—the “super priority” lien. The statute, C.R.S. § 38-33.3-316, says that “an amount equal to” the regularly scheduled expense assessments that “would have become due” in the six months prior to commencement of an action by the association or a foreclosure by a senior lienor is senior in priority to prior security interests. Here, that amount was $804. The actual assessments due at the time action was brought by the senior lienor were $687, but with attorney’s fees and costs the tab was $1,455. Therefore, the super priority portion of the lien would be either $804, if attorney’s fees and costs are included, or $687. The court affirms the trial court’s ruling that attorney’s fees are a part of the lien and, therefore, are to be included in the “super priority” calculation. C.R.S. § 38-33.3-316(1). The court reserves ruling on whether the prioritized portion of a lien may continue to increase, i.e., to accrue interest, after commencement of legal proceedings. Finally, the court is curiously silent as to whether the association gets its attorney fees as the prevailing party under the spurious lien statute. C.R.S. § 38-35-204(3). Estates in Eagle Ridge, LLLP v. Valley Bank & Trust Colo. App. July 28, 2005 2005 Colo. LEXIS 1209 (Colo. App. July 28, 2005) Foreclosure; Rule 120; sufficiency of mailing; sufficiency of notices; Rule 120 Venue. Valley Banks sought to foreclose on a deed of trust against property owned by the Hamiltons and their partnership. The loan was in excess of $1.4M. The deed of trust 10 listed the Hamiltons’ address, and provided that notice of foreclosure proceedings could be sent to that address unless the debtor gives formal notice to the bank of a change of address for the purposes of notice. Debtors moved from the address listed in the deed of trust, but did not give notice of change of address pursuant to the provision of the deed of trust. The property went to sale. Apparently after learning of the sale, the debtors filed this action to set aside the sale, arguing that the mailed notice was insufficient under C.R.C.P. 120, and violated due process rights. The court holds that the notice was sufficient, given the provision in the deed of trust that allowed notice to be given to that address unless the debtor provides a written notice of change of address. Of course, C.R.C.P. 120(a) requires a creditor to provide in its motion for an order authorizing the sale the name and last known address “as shown by the records of the moving party” grantor. The court reasons that the deed of trust is a record of the bank, and notice given to that address is sufficient. Aside from the lack of formal notice given to that address is sufficient. Aside from the lack of formal notice pursuant to the deed of trust, the decision is silent as to whether any other records in the bank’s files reflected the accurate address. Presumably not. The court rejects the argument that the debtors that Valley Bank violated their due process rights by not making a reasonable effort to locate their most current mailing address. See COLORADO REAL ESTATE MANUAL, Chapter 25, Pages 20008 (2004). (Commission form deed of trust has similar provision noted by court.) In a separate issue, debtors argue that lender improperly sought a C.R.C.P. 120 order in Denver District Court abandoning an initial filing for the same purpose in Larimer County District Court, because of procedural demands of that court. The court holds that Denver District Court had jurisdiction to enter the C.R.C.P. 120 order. The court holds that the rule of “priority of jurisdiction” did not apply to divest the Denver District Court jurisdiction. There was no risk of inconsistent decisions, as lender had abandoned the Larimer County District Court proceeding after its initial request for an order was denied on procedural grounds. JUDGMENTS / FRAUDULENT TRANSFER Hewitt v. Rice Colorado Court of Appeals, December 30, 2004 2004 Colo. App. LEXIS 2418, 2004 WL 3017267 Fraudulent Transfer Act; malicious prosecution; attorney’s fees. In 1991, Hewitt sued Pitkin County Bank on a variety of lender liability claims. The initial case ended with a judgment on the bank’s counterclaims against the borrower for $84,000. Some seven years later, when the judgment debtor sold property to an entity called VPA, the bank brought a fraudulent transfer claim, recorded a notice of lis pendens, and sought judgment for attorney’s fees incurred in postjudgment collection efforts. The following year, Hewitt (the judgment debtor) paid the “full” amount of the judgment. The bank then moved to dismiss the fraudulent transfer claims and “released” its notice of lis pendens. However, borrower continued to assert counterclaims against the bank and its counsel for slander of title, abuse of process regarding the lis pendens, and intentional interference with contract relations. Ultimately VPA settled those 11 counterclaims against the bank (but not its counsel, who had now withdrawn because they had a conflict) and received cash. The counterclaims of Hewitt and VPA against the bank’s attorneys were dismissed by the court based on the statute of limitations. Hewitt and VPA then filed another lawsuit against the bank’s counsel for malicious prosecution. The trial court dismisses and the court of appeals affirms, holding that a settlement does not satisfy the required element that “the [earlier] proceeding was resolved in favor of the plaintiff.” This element of a malicious prosecution claim requires that the initial case be dismissed on the merits. Finally, the attorneys recover their attorney’s fees against Hewitt because Hewitt’s tort claim was dismissed on a C.R.C.P. 12(b) motion. C.R.S. § 13-17201. Counsel should note that fraudulent transfer claims are frequently inciting counterclaims of this type, and counsel often need to step aside if they are named in the counterclaims. Shepler v. Whalen Colo. Supreme Court, September 12, 2005 119 P.3d 1084 (Colo. 2005) Judgment lien; equitable interest; priority; notice of lis pendens. We reviewed the decision of the court of appeals last year. The supreme court granted cert. and affirms. Husband with many judgment creditors takes a chunk of money and pays down a mortgage on property titled in his wife’s name. Several judgment creditors had recorded transcripts of judgment in the county where the property was located. One of the junior judgment creditors files a fraudulent transfer action seeking an equitable lien in the wife’s property. The other judgment creditors, senior to the plaintiff, intervene. They win on the fraudulent transfer claim, but who is first in line in terms of priority – the earliest recorded judgment lienor, or the first to record a notice of lis pendens along with a civil action to us seeking an equitable lien? In a five to two decision, with Kourlis and Coats dissenting, the Colorado Supreme Court holds that the judgment debtor had neither a legal or equitable interest in the property, and therefore judgment liens did not attach to the wife’s property. In order to create a lien, the judgment creditors must file a civil action seeking equitable relief. Such an action, along with a recording of a notice of lis pendens, establishes the creditor’s equitable lien on the fraudulently conveyed property. A junior creditor who first takes action to expose the fraudulent transfer by filing suit takes priority over senior creditors holding judgments recorded prior to that of plaintiff. The court’s reasoning is interesting, as is the dissent. The husband did not acquire an equitable interest in the property simply by paying down wife’s mortgage. The court then notes that a fraudulent transfer is voidable rather than void – it requires prosecution of a civil action. On this point, the court relies heavily on FREEMAN’S 1925 TREATISE ON THE LAW OF JUDGMENTS. The court rejects the senior creditor’s argument that payment of the mortgage by the husband gave husband a constructive trust on the property. Rather, the effect of the fraudulent transfer of funds to pay wife’s mortgage placed a constructive trust on the wife’s property in favor of the creditors. However, the court 12 determines that the lien does not arise as a result of the recording of the transcripts of judgment – because husband had no legal or equitable interest in the property – and, therefore, priority is determined in favor of the first party to bring an action to uncover the fraud and impose the constructive trust. The court cites with approval a 1924 case which held that the recording of a notice of lis pendens creates a lien on the property at the time that notice is filed. Shuck v. Quackenbush, 227 P. 1041, 1045 (Colo. 1924). The court finds that this result is equitable because it rewards the creditor who “put forth the most effort.” The court holds that the three “senior” judgment lien creditors, each of whom intervened simultaneously, shared equal priority against the property. In dissent, Justice Kourlis reasons that judgment liens attached to after-acquired property. If a constructive trust is established that is an equitable interest in property to which a judgment lien can attach. C.R.S. § 13-52-102(1). LEASES / EVICTION Dinnerware Plus Holdings, Inc. v. Silverthorne Factory Stores, LLC Colorado Court of Appeals, December 16, 2004 2004 Colo. App. LEXIS 2301, 2004 WL 2903590 Commercial lease interpretation; “provided that”; promise vs. condition precedent. This is a dispute involving the Mikasa store in the Silverthorne Factory Outlet shopping center. The long-term lease provided that tenant pay a fixed monthly rent, together with “pass-through charges” for percentage of taxes, maintenance, and insurance “provided all other tenants are similarly obligated.” If it turns out that other tenants are not charged their proportionate share of these charges, is tenant excused from this liability because landlord cannot prove a condition precedent, or does tenant have to pay the charges and sue landlord for damages for breach of contract? The court of appeals reverses the trial court, and says that it is a condition of performance. Tenant withheld payment of these charges when it learned that other tenants did not have to pay a proportionate share of these charges. Tenant filed a declaratory judgment action that it had no liability for these charges because payment of such charges by other tenants is a condition of its liability. Landlord filed an eviction action, and the cases were consolidated. The trial court found for landlord on the interpretation issue, and awarded judgment for the past due amounts. The eviction claim was nevertheless dismissed on procedural grounds that are not described. The court of appeals reverses in part, holding that “provided that” is language of condition, not promise. Therefore, landlord cannot recover pass-through charges from this tenant unless it can show that other tenants are similarly charged—a point which landlord concedes. The court distinguishes cases holding that conditions precedent are not favored if there is doubt as to the parties’ intention. The court holds that it will not apply that theory of contract interpretation here, in light of the fact that it was entirely within landlord’s control as to whether other tenants would be required to pay proportionate pass-through charges, and it did not consider the lease provision ambiguous. Since there is no liability, tenant is not in default, and tenant is awarded its fees under the FED statute. 13 Highlands Ranch Univ. Park, LLC v. UNO of Highlands Ranch, Inc. Colorado Court of Appeals, January 27, 2005 2005 Colo. App. LEXIS 109, 2005 WL 170735 Breach of commercial lease; guarantor’s liability; termination of lease. Highlands Ranch University Park (landlord) and Uno of Highlands Ranch (tenant) entered into a lease, and Uno Restaurants (a related entity) signed as guarantor. Under the lease, tenant agreed to construct a building and lease the site for 20 years. Upon expiration of the lease, or upon default, landlord was to acquire title to all improvements. Within six months of signing the lease, tenant informed landlord that it would not perform. Landlord proceeded to build a larger building on the site and obtain leases from two tenants. The combined rent from the two tenants was more than landlord would have received from the lease with the original tenant. In landlord’s suit against tenant and guarantor for breach of the lease and guaranty agreements, the trial court awarded damages, including the costs incurred by landlord to mitigate, and two years of lost rental incurred before rental payments began from the replacement tenants. The court of appeals holds that summary judgment on the issue of liability was appropriate because tenant’s repudiation and breach was unequivocal. The court of appeals affirms the trial court’s determination that guarantor’s liability was coextensive with that of the tenant, based on the language of the agreement, the purpose of the guaranty, and the circumstances surrounding its execution. However, the appeals court reverses the damage award. Both parties presented evidence that the rental value from the replacement tenants exceeded the rental value from the original tenant. They also presented evidence that the value of the larger replacement building had a higher terminal value than that of the smaller building required by the lease. The trial court erred when it limited its findings to analysis under the first two years of the lease (pursuant to a damage limitation provision in the lease) when looking at the mitigation issue, rather than considering evidence of the long-term rental and terminal building values. An offset should have been granted against tenant’s unpaid rent liability for landlord’s excess replacement rent, discounted to present value, and the same offset should have also been granted to guarantor. Additionally, the trial court erred when it did not offset the award of construction expenses to landlord by the difference between the terminal value of the larger building actually constructed and the terminal value of the smaller building required by the lease. Finally, the trial court lacked jurisdiction to grant prejudgment interest to landlord because defendants had already filed a notice of appeal with the court of appeals. CMCB Enterprises, Inc. v. Ferguson 114 P.3d 90 (Colo. App. 2005) Colorado Court of Appeals, February 24, 2005 2005 Colo. App. LEXIS 257, 2005 WL 427726 Past due rent; guarantor; successor corporation liability. CMCB, landlord, entered into a 25-year lease for a restaurant in Littleton. In 1993, the tenancy interest was assigned to Bocci’s, Inc., owned by Ferguson and Camozzi, who 14 guaranteed the lease. They started Duggan’s Grill in the space. In late 1993, tenants formed three corporations for each of three restaurants they owned; this one was Duggan’s Grill, Inc. They formed a fourth corporation, Basic, Inc., to act as the management entity for the three restaurants. Bocci’s transferred its assets to the three new corporations. Landlord consented to assignment of the lease to Duggan’s, Inc. The assignment contained covenants that the assignor remained liable. In 1996 Bocci’s asked landlord for permission to assign the lease to Robson. Landlord refused, but Robson took over the space in any event, and operated Duggan’s until 1999, when landlord evicted Robson for nonpayment. Landlord sued for rent, and the trial court after a bench trial found damages of $160,177. The real issue is which solvent parties could be held liable. Bocci’s had no assets, and Duggan’s, Inc. was now a shell. The court found that Basic was liable as a successor entity, a “mere continuation” of Bocci’s. A successor corporation may be liable for the debts of another corporation, even if it only purchases the assets and not the stock of the corporation, if (1) there is an express or implied assumption of liability; (2) the transaction results in a merger or consolidation of the two corporations; (3) the purchaser is a “mere continuation” of the seller; or (4) the transfer is fraudulent for the purpose of escaping liability. The mere continuation exception applies if there is a continuation of directors, management, and shareholder interest, or inadequate consideration. The question turns not on whether there is a continuation of the business, but rather whether the purchaser of the assets is essentially a continuation of the selling corporation. The court of appeals affirms the trial court’s judgment on this issue. The holding that the guarantors had not been released (on fact-specific grounds) is likewise affirmed, as is the trial court’s finding that landlord did not fail to mitigate its damages. The mitigation attempts ran the usual gamut and then some, including ads in the paper, emails, brochures, posting a sign on the premises, and engaging a real estate broker before the eviction started. Mishkin v. Young Colorado Supreme Court, February 28, 2005 107 P.3d 393 (Colo. 2005) Residential lease; security deposit; duty to account; “that amount wrongfully withheld.” A pro se tenant, with the support of three amicus curiae, wins a reversal of a county court judgment allowing treble damages for only part of the security deposit held by a landlord after expiration of the statutory period for accounting under C.R.S. § 38-12-103(3)(a). Despite a trial court finding that the amount of property damage to the rental unit exceeded the security deposit, the landlord’s failure to provide an accounting to the tenant and to return to the tenant that portion of the security deposit not properly withheld triggers the triple damage remedy. The statute allows the landlord to withhold money due for “nonpayment of rent, abandonment of the premises, or nonpayment of utility charges, repair work, or cleaning contracted for by the tenant.” Here, the landlord (as it were, an attorney) did provide an accounting almost immediately after receipt of the tenant’s mandatory seven-day notice of intent to file suit—a condition precedent to recovery of treble damages. Along with the accounting, the landlord withheld $1576.60 for damage, and returned the tenant a check for $50.40. The county court allowed damages based on 15 three times that smaller number. The court deals with conflicting provisions of the statute—the section that says that failure to provide an accounting works a forfeiture of “all rights to withhold any portion” of the security deposit; the sections that provide that “nothing in this section shall preclude the landlord from retaining the security deposit for . . . repair work;” and the section that provides that the treble damage award applies to “that portion of the security deposit wrongfully withheld.” In short, any withholding of any portion of the security deposit is “wrongful” if no accounting is given within the thirty-day (or longer if allowed by the lease) period. The majority valiantly attempts to explain the reason for the seven-day notice, if not to allow the landlord to cure the “default.” The dissent by Justice Kourlis is quite compelling in terms of dealing with the court’s own precedents and the language of the statute. Compare Turner v. Lyon, 539 P. 2d 1241, 1243 (1975) (purpose of the seven-day notice provision in subsection (3)(a) is to give landlords “one last week to return the security deposit”). Woznicki v. Musick 119 P.3d 567 (Colo. App. 2005) Colorado Court of Appeals, April 7, 2005 2005 Colo. App. LEXIS 514, 2005 WL 774434 Unlawful detainer; equitable mortgage; sufficiency of evidence. Musick sold a house in Aspen to Woznicki for an undisclosed amount, on terms recited in a “deal summary.” Apparently Woznicki borrowed a portion of the purchase price from a third party lender. Musick leased back the property for an 18-month period, with prepaid rent of $25,000 per month. Musick also retained an option to repurchase the property during the term of the lease. After 18 months passed, Musick stayed put, and Woznicki started an eviction action, which led to a multiplicity of claims and counterclaims. The trial court apparently severed the eviction claim from the other claims, and a jury trial was held on the issue of possession and damages. Musick defended on the basis that the sale was an equitable mortgage, though it is unclear whether any portion of the purchase price was deferred. Of course, an equitable mortgage must be foreclosed judicially, and the equitable owner has the benefit of statutory redemption rights. In any event, the court reviews the law on the elements of an equitable mortgage, and notes that the relevant factors in determining whether a transaction is a sale or a mortgage include the existence of a debt, the relationship between the parties, the availability of legal advice, the sophistication and circumstance of the parties, the adequacy of consideration and the possession of the property. No one factor is determinative. RESTATEMENT (THIRD) OF PROPERTY: MORTGAGES § 3.2. The court upholds the trial court’s ruling that the landlord presented sufficient evidence to persuade a jury that the transaction was a sale and a lease, rather than an equitable mortgage. The court also affirms the damage award for holdover rent calculated at $7500 per month, holding that the contract rent of $25,000 per month was “some evidence” of the fair market rent. Duhon v. Nelson Court of Appeals, August 11, 2005 2005 Colo. App. LEXIS 1300 (Colo. App. August 11, 2005) Mobile home eviction; expiration of lease; grounds for eviction. 16 In this case, the owner of a mobile home park wanted to sell the park. After the lease of one particular tenant expired, that tenant in addition, had listed her mobile home and her lot for sale, even though she did not own the space within the mobile home park. Owner served tenant with a notice to quit. A month later, owner filed a forcible entry and detainer action in county court. Tenant answered and brought counterclaims for intentional interference with contract, that being the owners interference with her contract with her broker to sell her mobile home. The case goes to trial before a jury, and jury holds in favor of the tenant on the eviction, and awards her damages on her counterclaim. The court of appeals affirms, holding that under the Mobile Home Eviction Statute C.R.S. § 38-12-203, expiration of a lease is not a grounds for eviction. The statute lists the following bases for eviction: violation of park rules, change of use of the mobile home park, and nonpayment of rent. The court of appeals also holds that the verdict for tenant on the interference of the contract claim is supported by the record. The potential buyer of the tenant’s mobile home testified that the park manager attempted to dissuade him from purchase by saying “you don’t wanna buy this trailer cause if you buy it, you’re gonna have to move it.” The manager also told tenant’s broker to get off the property, and stuck a can of mace in his face. It should be interesting to see if the legislature amends this statute, in light of the decision. The court of appeals denies the landlord’s argument that the statute, as interpreted, essentially creates a life in the tenant, because there are some available grounds for eviction. If you have clients with mobile home parks, it would probably pay to take a careful look at your leases. MALPRACTICE / PROFESSIONAL LIABILITY & CONDUCT Anstine v. Alexander Colorado Court of Appeals, April 21, 2005 2005 Colo. App. LEXIS 587, 2005 WL 913503 Legal malpractice; aiding and abetting client’s breach of fiduciary duty; pro rata fault. Builders Home Warranty (BHW) files for bankruptcy when it realizes that the insurance policy it had bought to cover warranties sold by BHW to homeowners was fraudulent and worthless. BHW’s attorneys suggested to its president that it could either try to find replacement coverage or file for bankruptcy. After encountering difficulty in finding replacement coverage, BHW’s attorneys again suggested bankruptcy. When BHW’s president refused, the attorneys nevertheless helped the company to “warehouse” the warranty premiums it had received and to use the premiums to purchase (unacceptable to regulators) off-shore policies. BHW eventually filed for bankruptcy, and the trustee sues BHW’s president for breach of fiduciary duty to the company, and sues the attorneys for legal malpractice and for aiding and abetting a breach of fiduciary duty. The jury finds for the attorneys on the malpractice claim, but finds them one percent at fault for the breach of fiduciary duty, while apportioning the remaining fault to BHW’s president. The 17 trial court then amended the verdict by applying a “conspiracy” exception to the pro rata liability statute and holding the attorneys and the president jointly liable. C.R.S. § 13-21111.5(4). The court of appeals holds that the trustee in bankruptcy, as a hypothetical judgment lien creditor, has standing to sue the BHW’s president and attorneys on the fiduciary duty claim. When a company becomes insolvent, its officers and directors become fiduciaries for the company’s creditors. There is no requirement that an aider and abettor owe a fiduciary duty to the third party injured by the principal’s breach; this allows the trustee to target the company’s attorneys. Since the jury had been properly instructed as to the aiding and abetting tort, its decision stands. The court notes that the trustee, in its role as a hypothetical judgment lien creditor, is not subject to the “in pari delicto” defense. However, the trial court erred when it amended the jury’s verdict to hold the attorneys and the president jointly liable under the “conspiracy” exception to the pro rata liability statute, C.R.S. § 13-21-111.5(4). The elements necessary to impose joint liability under this section are different and more complex than those required to find aiding and abetting liability. The jury was not given instructions as to joint liability, and did not make the detailed findings required under those instructions. Therefore the trial court’s verdict modification was actually a substantive change in the jury’s determination, because the jury may or may not have found the attorneys jointly liable if it had been properly instructed. A determination of aiding and abetting alone does not, as a matter of law, give rise to joint liability. Additionally, while Colorado allows an award of attorney fees in fiduciary duty cases involving trusts, that exception to the “American rule” requiring each party to pay their own fees does not apply here. PREMISES LIABILITY / TRESPASS / NUISANCE Anderson v. Hyland Hills Park & Recreation Dist. Colorado Court of Appeals, December 30, 2004 2004 Colo. App. LEXIS 2430, 2004 WL 3015808 Premises liability; standard of care; invitee; amusement parks. Anderson is hurt at a public water park ride when he grasps the side of a sled on which he is riding, rather than the handle of the slide – ouch. At trial Anderson successfully argues that a water park operator has the “highest degree of care a reasonably careful person could exercise,” consistent with CJI – CIV. 4th 12:13 (1998), a jury instruction based on a 1964 case dealing with amusement parks. However, consistent with the holding in Vigil v. Franklin, 103 P.3d 322 (Colo. 2004) the water park operator is a landowner and entitled to the protections of the premises liability statute. A rider on a water park ride is an invitee, and can recover only for damages caused by the landowner’s unreasonable failure to exercise reasonable care to protect against the dangers of which it knew or should have known. C.R.S. § 13-21-115(3)(c). The judgment is reversed and remanded so that the water park’s liability can be tested against this lesser standard. 18 Practice point - both sides of the personal injury bar can use the holding in Vigil that all common law standards — for claims as well as defenses — are superceded by the premises liability statute. Wilson v. Marchiondo Colorado Court of Appeals, April 7, 2005 2005 Colo. App. LEXIS 509, 2005 WL 774404 Premises liability statute; dog bite; landlord liability. Tenants tell landlord prior to signing lease that they own a Rottweiler. Landlord agrees to permit the dog to be kept on the premises, but requires tenants to post “Beware of Dog” signs. The dog bites a child playing with tenants’ children, and the victim and his parents sue landlord. Landlord wins on summary judgment. Under the premises liability statute, C.R.S. § 13-21-115, the court first considers whether the landlord owed victim a duty of care after leasing the residence. Generally, tenants are entitled to the exclusive possession of leased premises, classifying them as “persons in possession” under the premises liability statute. The general rule applies in this case, even though landlord did reserve a right of inspection and maintenance. This reservation is not seen as a sufficient attribute of control to support imposition of tort liability. Additionally, landlord’s verbal grant of permission for the dog to be kept on the premises does not result in an agreement by him to keep possession or control of the dog. The second issue on review is whether landlord was a “person in possession” of the property before signing the lease, which would result in a duty of care owed to the victim as a licensee wherein liability could be imposed for an “unreasonable failure to warn of dangers not created by the landowner which are not ordinarily present on property of the type involved and of which the landowner actually knew.” The court of appeals holds that landlord could only be liable for the dog attack if he actually knew, prior to signing the lease with tenants, that the dog was dangerous. The court of appeals upholds the trial court’s determination based on evidence in the record that there was no genuine issue of material fact that landlord had actual knowledge of the dog’s violent nature before signing the lease with tenants. Harsh v. Cure Feeders, L.L.C. 116 P.3d 1286 (Colo. App. 2005) Colorado Court of Appeals, June 2, 2005 2005 Colo. App. LEXIS 842, 2005 WL 1303261 Crop loss; trespassing animals; measure of damages; Colorado fence law. In a neighborly dispute between plaintiff farmer and defendant feedlot operator over trespassing cattle, the court of appeals reverses the trial court’s decision to award a mere $150 to plaintiff (rent for one day of grazing). Defendant’s cattle went on quite a romp, to the point of damaging a tank and causing a substantial spill of fertilizer, which in turn destroyed plaintiff’s crops on a large swath of land. Colorado’s fence law, C.R.S. § 3536-102(1), protects landowners from trespassing animals that have been able to make their way through a “lawful fence” by permitting recovery of damages for trespass and 19 injury to “grass, garden or vegetable products, or other crops.” The court of appeals holds that the proper measure of damages for partial crop destruction is the one used in Bloxsom v. San Luis Valley Crop Care, Inc., 596 P.2d 1189 (Colo. 1979) (difference between income from damaged crop and “the average yield of the same crop on similar land in the agricultural neighborhood in the same season and locality”). The evidence plaintiff presented was sufficient to prove damages and the court remands for an award of the difference between yields plus prejudgment and postjudgment interest, a sum exceeding $15,000. As for the damage from the fertilizer spill, the court of appeals holds that the trial court erred in relying on Colorado fence law to exclude plaintiff’s non-crop damages from the damaged fertilizer tank (the lost fertilizer, clean up costs, etc.). By describing damages that can be recovered to crops, the statute should not be read to limit recovery under the common law to other types of consequential damages. At best, the fence law serves as a defense to owners of trespassing animals who can prove that the claimant’s fence was insufficient to guard against intruders. Since there was no dispute that plaintiff’s fence in this case was a lawful fence, the fence law does not serve as a limitation on damages awarded to plaintiff. PROPERTY TAXATION AND ASSESSMENTS Bd. of Assessment Appeals v. Sampson Colorado Supreme Court, January 10, 2005 105 P.3d 198 (Colo. App. 2005) Tax appeals; burden of proof; mobile homes. Landowner/taxpayer initially got a notice of valuation for his mobile home and ten-acre parcel in the amount of $93,000. After some sales in Teller County came in at higher numbers, the Board of Equalization ordered the assessor to do new valuations for mobile homes. It did, and landowner got a new notice for $137,000. He appealed to the BOE, which affirmed, and to the Board of Assessment Appeals, which reversed. The Board agreed with landowner that the comparable sales that formed the basis for the new valuation were materially different, in that the comparable properties had permanent foundations and public road access; landowner’s mobile home had only a nonpermanent cinder block foundation, and was on a privately maintained road. The Board ordered the assessor to revalue the property consistent with the initial valuation. The county appeals, arguing that there is no evidence in the record to support this valuation because landowner (appearing pro se) presented no evidence at his hearing. The court holds that a taxpayer protesting an assessment in a BAA proceeding only has the burden to prove by a preponderance of the evidence that the assessment is incorrect, and need not prove an alternate valuation. In an exhausting 29 paragraphs reviewing the law on burden of proof, the court finds that the proper remedy is ordinarily to remand for a new assessment. Here, however, it is appropriate to reinstate the prior valuation, where the record does not reflect whether the BOE agreed on the initial valuation. Landowner wins. 20 Hepp v. Boulder County Assessor 113 P.3d 1268 (Colo. App. 2005) Colorado Court of Appeals, May 5, 2005 2005 Colo. App. LEXIS 677, 2005 WL 1038884 Classification of real property; statutory criteria for agricultural classification. This property tax case concerns two adjacent parcels of land. Prior to 1995, the parcels were used for agricultural purposes. From 1995 to 1999, the parcels were used for mining operations. Reclamation activities were being conducted on the land as of the 2001 assessment date. The county classified the land as vacant land, and the taxpayer challenged the assessment and sought classification and valuation for the land as agricultural land. The trial court originally found that because the land was still undergoing reclamation activities, it should be classified as a mine. However, after a hearing on the parties’ post-trial motions, the court found that the mining operation was “merely an interruption” in the agricultural use of the land and, therefore, it should properly be classified as agricultural land. The court of appeals reverses the trial court’s classification as error and remands for further review and reclassification, although it makes clear what it believes the trial court should find. The taxpayer had the burden of proving any qualifying uses to support his agricultural classification argument. Under C.R.S. § 39-1-102(1.6)(a)(I), agricultural land must have been used as such presently and for the two years prior. Any agricultural classification must be based on statutory criteria, not on any non-statutory equitable considerations. Regardless of the taxpayer’s subjective intent to use the land agriculturally once the reclamation activities have ceased, the land’s use for the previous two years must meet the statutory definition. The taxpayer admitted that no agricultural activities took place in the previous two years, and the court of appeals also rejects his argument that the subject parcels met the criteria for qualifying conservation practices. The only two types of qualifying conservation plans are those listed in the statute; taxpayer’s claims of an analogous conservation plan are not sufficient. The court of appeals also remands for trial court revaluation. Family Tree Foundation v. Prop. Tax Administrator Colorado Court of Appeals, June 30, 2005 2005 Colo. App. LEXIS 1012, 2005 WL 1530108 Tax exempt status for real property. Family Tree is a nonprofit organization that provides transitional housing for homeless people and victims of domestic violence. It appealed the Property Tax Administrator’s determination that the single family homes it owned were vacant as of January 1, rendering them taxable for the entire year. The Board of Assessment Appeals found that although the properties were vacant on January 1, it was undisputed that they were subsequently occupied during the year by qualified residents and were never used for profit or gain, and that using the January 1 date for determining tax exempt status unduly penalized Family Tree. The court of appeals affirms. It also rejects the Administrator’s 21 arguments that the language under both C.R.S. § 39-3-112(4) and C.R.S. § 39-1-105 require a January 1 determination date. Family Tree’s units are “by their very nature” intended to have periodic vacancies, and the Administrator’s insistence on basing tax exempt status on one day’s occupancy status “ignores the reality of Family Tree’s stated charitable purpose.” TITLES / TITLE INSURANCE / QUIET TITLE ACTIONS Strekal v. Espe Colorado Court of Appeals, December 16, 2004 114 P.3d 67 (Colo. App. 2004) 2004 Colo. App. LEXIS 2298, 2004 WL 2903583 Civil theft statute; action to recover stolen property; good faith purchaser; recording act. Although largely dicta, since the issue before the court was really based on claims preclusion, the court holds (to assist the lower court on remand) that a claimant under the civil theft statute, C.R.S. § 18-4-405, cannot recover “stolen” real property against a good faith purchaser who is protected under our race-notice recording statute, C.R.S. § 38-35-109. Although we are denied some of the fun facts because they were covered in an earlier, unreported decision of the court of appeals, it appears that Crow sold property to Strekel, who then conveyed title back to Crow for the purpose of “clearing a title defect,” with the understanding that Crow would fix the title defect and reconvey. Crow broke that promise, “forcibly evict[ed]” Strekel (presumably without civil action) and sold to Masters, who borrowed money from Lender, recording a deed of trust. At that point Strekel sued everyone and recorded a notice of lis pendens. He lost that suit. In the meantime, Lender foreclosed on the property and sold to Espe. Strekel sues Espe to recover the “stolen” property, relying on C.R.S. § 18-4-405. It appears that Espe, while aware of the prior claims because of the notice of lis pendens in the title chain, purchased from Lender who was a good faith purchaser. Espe is held to be protected under a good faith purchaser “shelter rule.” The court holds that even if the stolen property statute were to apply to claims of theft by deception (it reserves judgment on that), as opposed to claims of theft by forgery or force, the stolen property statute was not intended to override the recording act in this situation. The court is careful to recognize and distinguish Upson v. Goodland State Bank, 823 P.2d 704 (Colo. 1992), which holds that a forged deed is void and does not pass title, even upon subsequent conveyance to a bona fide purchaser. Argus Real Estate, Inc. v. E-470 Pub. Highway Auth. Colorado Supreme Court, March 28, 2005 109 P.3d 604 (Colo. 2005) Uniform Statutory Rule Against Perpetuities; reformation; res judicata. 22 In 1990, just months before Colorado’s adoption of the Uniform Statutory Rule Against Perpetuities, Argus’ predecessor entered into a contract with the Authority. It sold two parcels of land, presumably under threat of condemnation, and donated a third parcel. Under the terms of the contract, if the Authority no longer needed the gift parcel, the Authority would offer the parcel back to Argus or its assigns by quitclaim deed for no charge. As we discussed last year in reviewing the lower court’s opinion, Argus sued the Authority after eleven years passed, the highway was built on land a mile to the east of the gift parcel, and the Authority refused to return the land. The trial court agreed with the Authority that the condition of the gift violated the common law rule against perpetuities, and dismissed the claim. This was affirmed on appeal. Argus then brought a claim for reformation of the gift contract under the mandatory reformation provision of C.R.S. § 15-11-1106(2). The action was dismissed on res judicata grounds, and that holding is affirmed by the Colorado Supreme Court. The thrust of the decision is that the above statutory language does not create a statutory exception to the common law rule of claim preclusion, which bars a party from splitting its claims and proceeding with “identical” claims in succeeding actions. For the purpose of the claims preclusion law, a claim that “could have been brought” in the first action is identical to the claims in the first action. Counsel should take note of the following: (1) Learn to spot a donative transfer (as opposed to a commercial, arm’s-length sale or lease of property) that is still subject to the statutory Rule against perpetuities; (2) consider in drafting documents dealing with potential future transfers of title (options, first refusal rights, lease renewals, and conditions subsequent) language recognizing the USRAP and noting the parties’ intent as to whether an interest is donative or not; and (2) if the Rule is raised against your client at any point in litigation regarding the effectiveness of a donative transfer, demand reformation immediately. Hicks v. Londre Colorado Supreme Court, December 19, 2005 2005 Colorado Supreme Court, 2005 WL 3455840 Equitable Subrogation. The Colorado Supreme Court applies the doctrine of equitable subrogation to allow new purchasers of real property and their lender to obtain priority over a judgment lien previously recorded against the prior owner of the property. The judgment creditor, Hicks, had obtained a judgment against Grubbs in the amount of $413,000.00. Hicks properly recorded a transcript of the judgment which attached to Grubb’s house in Arapahoe County. In the transaction in which Grubbs sold the house to the Londres, the title insurance company failed to discover Hick’s lien. The new lender, Chase, provided a $1 million loan, and the Londres invested 510,000.00 of their own dollars. Later, Hicks filed a foreclosure action, claiming to be prior in position to either Chase or the Londres. The trial court agreed with Hicks, the Court of Appeals reversed, holding that the Londres and Chase had a superior position to Hicks, despite the fact that Hicks recorded first, and the Supreme Court affirms. 23 The Supreme Court lists five factors for equitable subrogation: “(1) the subrogee made the payment to protect his or her own interest, (2) the subrogee did not act as a volunteer, (3) the subrogee was not primarily liable for the debt paid, (4) the subrogee paid off the entire encumbrance, and (5) subrogation would not work any injustice to the rights of the junior lienholder.” (Slip Opinion at 4.) The primary discussion focuses on factor 5, the equities. The Supreme Court finds that Chase and Londres were not negligent because they relied on the title insurance commitment, which did not reveal the lien. Focusing on Hicks, the Supreme Court finds no prejudice to him. There is no evidence that the Chase loan had more detrimental terms to Hicks than the prior loan that had been paid off as part of the sale of the property. Further, the court says, had Hicks appeared at the closing, the property would not have sold because the sale price was less than the combined liens, yet the lenders released them so that Hicks had no equity under his prior position. With equitable subrogation, the property was transferred, and Hicks moved from fourth priority (because of a total of three prior deeds of trust) to third priority, behind only Chase and the Londres. ZONING / LAND USE CONTROL Boone v. Bd. of County Comm’rs of Elbert County Colorado Court of Appeals, December 16, 2004 107 P.3d 1114 (Colo. App. 2004) Zoning; 35-acre subdivision regulations. Elbert County’s zoning regulations for development of land parcels between 35 acres and 59.99 acres in size do not on their face violate the state exemption of 35-acre parcels from subdivision regulation. C.R.S. § 30-28-101(10)(b). Reversing the trial court, which agreed with the landowner, the court generally notes the differences between zoning and subdivision regulation. In Elbert County, if one divides a larger parcel into a series of 35to 59-acre parcels, zoning changes from A to A-1. What is allowed as a matter of right under A is allowable only by special review under A-1, which involves obtaining approval of a land use application prior to getting a building permit. Elbert County Zoning Reg. pt. II, sec.3(c). However, the court does remand for development of a record as to whether the zoning regulations effectively impose the functional equivalent of subdivision regulations. The court suggests that the landowner should actually apply for a use, and challenge the regulations “as applied” since the record was insufficient to determine whether rezoning was a “ruse for subdivision regulation.” Olson v. Hillside Community Church, S.B.C. Colorado Court of Appeals, June 2, 2005 2005 Colo. App. LEXIS 838, 2005 WL 1303263 Municipal zoning ordinances; private right of action; exclusive jurisdiction; prescriptive easement. In this second round of appeals in a case involving construction of a church addition 24 without obtaining building department approval, the court of appeals upholds the trial court’s finding that the district court lacks subject matter jurisdiction over the equitable claims, and its finding that plaintiffs did not meet their burden of proof regarding their claimed prescriptive easement over part of the church’s property. The action originally arose when the church began construction of an addition to its existing building. The neighbors first complained that the construction was not in compliance with portions of the Golden Municipal Code (GMC) and the Uniform Building Code (UBC). Golden granted variances and permits after the addition was substantially completed. The plaintiffs filed suit in Jefferson County District Court under various claims, including a claim under the GMC and a claim asserting a prescriptive easement. In the first round of appeals, the court of appeals remanded to the trial court with directions to have the church remove the offending improvements. In the meantime, the Colorado Supreme Court issued its decision in Town of Frisco v. Baum, 90 P.3d 845 (Colo. 2004), and held that when a municipality exercises its jurisdiction as a home rule city to address local and municipal matters in its municipal court, that exercise deprives the district court original jurisdiction. Under this rule, the court of appeals dismisses plaintiffs’ claims in the district court for lack of subject matter jurisdiction. Finally, the court of appeals holds that the trial court erred in finding no prescriptive easement when it found that plaintiffs did not prove exclusive use, because exclusive use is not necessary to establish an easement by prescription. However, the error is harmless because there was sufficient evidence in the record to support the court’s finding that plaintiffs’ use was not open and notorious. Droste v. Bd. of County Comm’rs of the County of Pitkin, Colorado Court of Appeals, October 6, 2005 2005 Colo. App. LEXIS 1620 (Colo. App. October 6, 2005) Development moratorium; statutory interpretation; implied power. The Droste family owns a large parcel of land in Pitkin County. Under a 1974 zoning ordinance, the owners have the right to build a residence on at least ten acres as a use by right. This case concerns the county’s imposition of a temporary moratorium on development in parts of the county, including the Droste land, under the Areas and Activiites of State Interest Act (“AASIA”), C.R.S. § 24-65.1-101 et seq. and the Local Government Land Use control Enabling Act, § 29-20-101 (“Enabling Act”) et seq. In 2003, after denying several development applications by the Droste family, the county passed an emergency ordinance creating a temporary moratorium on accepting, processing and approving development applications concerning certain lands in the county. The stated purpose was to allow time to study what zoning and development regulations would be required to comply with the state’s requirement that a master plan be created for the county by January 2004. The ordinance recited that 60 days should be sufficient time for the study, it provided that the moratorium remain in effect “until formally terminated” by the county. Ninety days later, the county extended the moratorium for an additional six months, at a minimum. 25 The Drostes filed an action seeking a declaratory judgment that the temporary moratorium was void under the AASIA and the Enabling Act. The action did not claim that there was an unconstitutional taking, but rather sought a ruling that a moratorium of this type was unauthorized, especially in light of specific provisions in the statutes allowing temporary bans on construction for a temporary period not to exceed six months. C.R.S. § 30-28-121 ( board of commissioners pending adoption of a zoning plan may promulgate resolution without public hearing regulations of a temporary nature not exceeding six months prohibiting construction). The court of appeals affirms the trial court and holds that a moratorium exceeding six months may be authorized under the more general, implied powers in the above statutes as well as an exercise of general zoning power. It rejected the argument that such power could be implied, given the specific and limited grant of power to impose moratoriums under the county planning statute referenced above. The Enabling Act is designed to give the local governments additional or supplemental powers for the purposes set out in the act, which include controlling population density. The fact that the ordinance did not include a specific termination date did not render the ordinance void, in light of the stated intent that it be for a limited period of time. The court also noted in passing that the ordinance was actually dissolved after ten months, long before argument of the case on appeal. Allely v. City of Evans Court of Appeals, October 6, 2005 2005 Colo. App. LEXIS 1600 (Colo. App. October 6, 2005) Petition to disconnect from city; application to home rule city. C.R.S. § 31-12-601 provides that the owners of a tract or contiguous tracts of land that lie on or next to the border of “any city” may petition the district court to have the land disconnected form the city under certain conditions. Under the definitions applicable to this statute, a “city” is “ . . . a municipal corporation having a population of more than two thousand incorporated pursuant to the provisions of part 1 or reorganized pursuant to the provisions of part 3 of article 2 of this title or pursuant to the provisions of any other general law on or after July 3, 1877, and a municipal corporation, regardless of population, organized as a city on December 31, 1980, and choosing not to reorganize as a town pursuant to part 2 of article 1 of this title, but does not include any city incorporated prior to July 3, 1877, which has chosen not to reorganize nor any city or city and county which has chosen to adopt a home rule charter pursuant to the provisions of article XX of the state constitution.” Article XX, § 6 of the state constitution provides that the statutes of the state apply to home rule cities, except insofar as superceded by an ordinance passed pursuant to the city charter. Therefore, the court must determine whether the state statute regarding disconnection applies, or whether it is superceded by the applicable Evans ordinance. The latter allows disconnection but under a different set of conditions with which the plaintiffs did not comply. The court of appeals holds that Evans, as a home rule city, could pass its own ordinance and that its ordinance supercede the state statute. The state legislature could have used the term ‘municipality,” which includes home rule cities. See C.R.S. § 31-1-101(6). But it did not. Further, the legislative preamble and the testimony before the legislature upon the recodification of Title 31 made clear that wherever the word “city” is used without a modifier, only 26 statutory cities are affected. LEGISLATIVE DEVELOPMENTS HB 05-1032, Land Set Aside for Governmental Purposes This bill amends C.R.S. § 24-67-106 (3) (b) to provide that any land located within a planned unit development that has been set aside for a governmental use or purpose and for which title is held by a governmental entity, authorizes that governmental entity to subdivide, remove PUD restrictions, sell or otherwise dispose of all or any portion of the land. This action will only be taken upon a finding by the county or municipality, following a public hearing, that all or any portion of the land is not reasonable expected to be necessary for a governmental use or purpose or that the governmental use or purpose will be furthered by disposal of the land. The Bill requires that the future use of the land shall in all other respects be consistent with the efficient development and preservation of the entire PUD and with the plan. SB 05-12, Compensation for Board Members of Special Districts, C.R.S. § 32-1-902 This bill increases the compensation to members of a special district board of directors to an amount not to exceed $75.00 per meeting and $1,000.00 per year. SB 05-80, Military Installations of Land Use Changes, C.R.S. § 29-1-201, et. seq. This bill requires each local government within which is located all or any portion of a military base to provide to the military information relating to proposed changes to the local government’s comprehensive plan or land regulations, if the changes to the plan or regulations would significantly affect the intensity, density, or use of any area within two miles of the military base. The military is to be provided with an opportunity to comment on the changes. SB 05-224, Urban Renewal, C.R.S. § 31-25-107 (3.5) and 9 (a) (II) This statutory amendment expands existing statutory provisions governing the approval of an urban renewal plan or substantial modification to such plan. It requires the Urban Renewal Authority to submit certain information to the county in which it is located, in addition to information provided to the governing body of the municipality in which their authority has been established. The information is to be provided to the county 30 days prior to any hearing on the urban renewal plan. The information includes an impact report when property taxes collected as a result of the county levy will be utilized. Inadvertent failure of a governing or an authority to submit a plan, modification, or report to a county does not create a cause of action or invalidate any plan or modification. The bill authorizes the governing body of the urban renewal authority to enter into an agreement with a county that may provide for allocation of responsibility among the parties for payment of the costs of any additional infrastructure or services 27 necessary to offset the urban renewal impact. HB 05-1040, Applying for Real Estate Broker’s License, C.R.S. § 12-61-103 (1) (b) (I) This act requires individuals applying for a real estate broker license to submit a set of fingerprints directly to the Colorado Bureau of Investigation and specifies that the Bureau shall forward the results of a background check to the Real Estate Commission. HB 05-1264, Repeal of Real Estate Recovery Fund, C.R.S. § 12-61-301, et. seq. The Real Estate Recovery Fund, which has had no funds in recent years, is repealed. The bill provides for final civil actions seeking reimbursement from the fund to be filed within 30 days after June 26, 2005, and provides for payment of pending claims. Upon repeal of the statute, the Real Estate Commission may assess penalties when a licensee is guilty of fraud, misrepresentation, deceit, or conversion of trust funds that results in the entry of a civil judgment for damages. HB 05-1159, Sale of Tax Liens by a County Treasurer, C.R.S. § 39-11-100, et. seq. This bill allows public auction by internet or other electronic medium of property tax liens. It requires that the published notice state that the auction is to be conducted by means of the internet or other electronic medium, and include instructions for participation. It allows for payment to the county treasurer at a tax lien sale by cash, negotiable paper, or electronic funds transfer. SB 05-56, Property Tax Appeal To assist the assessor, this bill amends C.R.S. § 39-8-109 to require that the appellant, following a successful property tax appeal, provide a copy of the sustained appeal to the county assessor, and the assessor shall provide the treasurer with copies of the sustained appeal prior to the appellant receiving a refund of taxes, delinquent interest, costs, and witness fees. SB 05-105, Alternative Protestant Appeal Procedures, C.R.S. § 39-5-122 This bill allows any county, not just the counties of Boulder, El Paso, Jefferson, and Denver to use an alternate protest and appeal procedure prior to May 1 of each year, if requested by the county assessor. The County Board of Equalization shall hear petitions from any person whose objections or protests have been refused or denied by the assessor. HB 05-1058, Rights of Mobile Homeowners, C.R.S. § 38-12-201, et. seq. This bill amends § 206 to clarify that homeowners have a right to meet and to form a homeowner’s association. Section 213 is amended to specify that terms of the 28 tenancy and the amount of rent must be set out in a rental agreement, that the standard rental agreement shall be for a month-to-month tenancy, and that upon written request by the homeowner to the landlord, the landlord shall allow a rental agreement for fixed tenancy of not less than one year if the homeowner is current in all rent payments and not in violation of the rental agreement, except that an initial rental agreement for a fixed tenancy may be for less than one year in order to insure conformity with a standard anniversary date. A landlord shall not evict or otherwise penalize a homeowner for requesting a rental agreement for a fixed period. The bill amends § 217 to provide that if a mobile home park owner intends to change the use of the land comprising the mobile home park, it shall give written notice mailed to each mobile home owner at the address on the rental agreement at least 180 days before the change in use will occur. It broadens the notice requirement applicable when a mobile home park owner intends to sell the park and adds a section encouraging local governments to allow and protect mobile home parks in their jurisdictions, and to enact plans, including incentives to increase the number of mobile home parks in their jurisdictions. One or members of a homeowner’s association may form a cooperative for the purpose of offering to purchase a mobile home park. Finally, the act provides a civil right of action against landlords that violate any provision of the article, including actual economic damages and attorney’s fees and costs. HB 05-1169, Housing Issues for Victims of Domestic Violence, C.R.S. § 13-40-104 This bill prevents a landlord from seeking possession under the forcible entry and detainer act due to an alleged substantial violation, if the violation was documented that the tenant was the victim of domestic violence or abuse. A tenant that is the victim of reported domestic violence or abuse within the prior 60 days may vacate the premises due to fear of imminent danger for herself or for her children, and the tenant may terminate the lease and vacate the premises without further liability other than payment of one month’s rent within 90 days after the lease termination. The bill allows a landlord to hold a security deposit until such termination amount is paid. SB 05-100, Concerning Increased Protection for Homeowners This bill amends sections of the Colorado Common Interest Ownership Act (“CCIOA”), C.R.S. § 38-33.3-101, et. seq., with several new requirements, including that: sellers of homes in common interest communities must disclose to buyers certain association documents and buyer responsibilities and obligations as members of the association; associations must make certain annual disclosures to homeowners on a Web site or by e-mail, mail, or personal delivery; all Board member elections must be by secret ballot; ballots at a member meeting must be counted by a neutral third party or a unit owner who is not a candidate, is present at the meeting, and is selected randomly at the meeting from a pool of at least two such non-candidate owners; associations must provide physical notice of any unit owner meeting but may give electronic notice if requested by owner in addition to posting notice on the Web site; associations may not covenant to either restrict or limit xeriscaping or require the primary or exclusive use of turf grass and may not place more procedural requirements on unit owners seeking 29 approval for xeriscaping than those rules that already exist; associations may not prohibit unit owners from displaying the American flag on their property or completely prohibit the display of political signs; associations may not prohibit the parking of a motor vehicle on a street, driveway or guest parking area if the owner of the vehicle is required by his or her employer to keep the vehicle at his residence during designated times; associations may not require use of nonflammable materials that would exceed the cost of replacing flammable materials; associations must have their books and records audited or reviewed using generally accepted auditing standards once every two years; and Board members must disclose that they have a conflict of interest in any action or contract that would benefit any board member or a board member’s relative. HB 05-1168, Administrative Matters Related to a Foreclosure Proceeding, C.R.S. § 3838-101 et. seq. This bill provides for certain minor changes to the foreclosure statutes. Records relating to a foreclosure sale may be sent or received in electronic form between a creditor or creditor’s attorney and the public trustee or sheriff. The public trustee and/or sheriff may receive and/or store any foreclosure records in an electronic format or by electronic means. At a foreclosure sale, the public trustee may provide a written copy of the information that otherwise would be read at the foreclosure sale. Certain fees and deposits are adjusted. A certificate of purchase or redemption may be assigned by separate document, rather than by endorsement upon the certificate. HB 05-1195, Requirement that a Deed Convey Any Interest Held by the Grantor and Vacated Rights of Way, C.R.S. § 38-30-113 Every deed for real property in the form provided by statute shall be deemed to be a conveyance of the grantor’s interest, if any, in any vacated street, alley, or right-of-way that adjoins the real property, unless such transfer is expressly excluded in the deed. Consistent with this statute, the Colorado Bar Association has approved amendments to Title Standard 8.3.1. 30